Baltimore's spending panel is expected to approve a pair of land deals with prospective casino owners today that could fulfill Mayor Sheila Dixon's pledge to lower city property taxes.
Under the agreement, the city would extend a 75-year lease for a Russell Street parcel to Baltimore City Entertainment Group to build a slots parlor, and enter into an unusual profit-sharing arrangement: The city would get 2.99 percent of the gross gambling revenue as rent. Also, the city would sell the casino owners three nearby plots that would immediately begin generating $3.2 million in annual property taxes.
The combination is expected to net $18 million for the city the first year the casino is operating and $21 million the second. Along with an expected rise in revenue from income and hotel taxes, the city says it would be enough to cut property taxes by about 3.5 percent, or $80 on a $100,000 house.
If gambling revenue falls short of projections, the city would receive guaranteed minimum payments.
"This is unlike any deal we have ever negotiated," said First Deputy Mayor Andrew B. Frank.
The city's Board of Estimates will vote on the deal this morning.
"I think we're very satisfied," said M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's economic development arm.
Michael Cryor, a spokesman for the Baltimore City Entertainment Group, did not return phone calls seeking comment.
The outline was tentatively reached in August, but today's expected approval would seal the details of a complex deal that the city has been working toward since 2007, when Dixon threw her support behind a slots parlor near M&T Bank Stadium as a way to reduce city property taxes. City homeowners pay $2.268 per $100 of assessed values - the highest rate in the state - and today's deal would allow a seven-cent cut the first year and eight cents after that.
Of the five sites in the state where slots will be permitted, Baltimore is the only one where the casino owner must pay rent to the local government - a condition Dixon required in exchange for her support. The city also expects to receive tens of millions of dollars from local impact fees and funds set aside for education.
But the deal would collapse if Baltimore City Entertainment Group fails to obtain a state license to run a slots facility, or if the group cannot come up with the added $19.5 million in fees to build a larger parlor than initially planned. The state slots commission has approved slots gambling at a racetrack near Ocean City and could license Penn National for a facility in Cecil County at its meeting today.
